Friday Closing Dairy Market Update - Milk Futures Gain for The Week

MILK:

Milk futures showed slight gains for the week as spot cheese prices maintained the recent gains. The butter price declined for the week, but Class IV futures posted similar gains as Class III futures. There was not much fundamental news to trigger much volatility. Milk production is following a seasonal path of slow growth. Despite the large decline in California milk production in November, the rest of the western states are doing well with the Western states showing overall growth. Milk production is running lower than a year ago, but it is improving in comparison. It is reported that spot milk this past week was a bit lower than reported for the previous week. Spot milk prices ran as much as $7.00 below class up to $0.50 below class depending on the location. The USDA will release the November Dairy Products report on Monday. Grain futures took a hit today keeping feed prices in check and indicating they may remain that way.

AVERAGE CLASS III PRICES:

3 Month:	$20.41
6 Month:	$19.92
9 Month:	$19.65
12 Month:	$19.42

CHEESE:

For the week, blocks increased 4.75 cents with seven loads traded. The average price for the week was $1.9131. Barrels increased by 6.25 cents with five loads traded. The average price was $1.8219. Dry whey remained unchanged at 75 cents with one load traded. Cheese continues to see supportive buying as there is some concern developing over the milk supply if bird flu continues to impact more dairy herds. The average block cheese price for December was $1.7945 per pound compared to $1.7184 in November. The average barrel cheese price was $1.7246 compared to $1.7237 in November. The average dry whey price was 73.87 cents compared to 64.08 cents in November.

BUTTER:

For the week, butter declined 2.25 cents with 16 loads traded. The average price for the week was $2.5544. Grade A nonfat dry milk declined by 2 cents with 15 loads traded. The weekly average price was $1.3738. The average butter price for December was $2.5330 per pound compared to $2.6003 for November. The average nonfat dry milk price was $1.3824 compared to $1.3905 for November.

OUTSIDE MARKETS SUMMARY:

March corn closed down 8.75 cents per bushel at $4.5075, March soybeans closed down 20.25 cents at $9.9175 and March soybean meal closed down $11.30 per ton at $308.60. March Chicago wheat closed down 16.50 cents at $5.2925. February live cattle closed up $0.45 at $194.05. February crude oil is up $0.91 per barrel at $74.04. The Dow Jones Industrial Average is up 340 points at 42,732 with the NASDAQ up 341 points at 19,622.

Friday Midday Dairy Market Summary - Spot Prices Show Minor Gains

OUTSIDE MARKETS SUMMARY:

CORN:	9 Lower
SOYBEANS:	20 Lower
SOYBEAN MEAL:	$11.70 Lower
LIVE CATTLE:	$0.37 Higher
DOW JONES:	331 Points Higher
NASDAQ:	324 Points Higher
CRUDE OIL:	$0.81 Higher

MIDDAY MARKET UPDATE:

The block cheese price gained 0.75 cents closing at $1.92 with four loads traded. The barrel cheese price gained 0.50 cent closing at $1.83 with three loads traded. An uncovered offer remained for a load of barrels with no unfilled bids. The dry whey price was unchanged at 75 cents with one load traded. Class III futures are 7 cents lower to 9 cents higher. Trading activity has been moderate with most of the activity in the January and February contracts. The butter price gained 0.75 cent closing at $2.5525 with five loads traded. There were three unfilled bids and three uncovered offers remaining at the close. Grade A nonfat dry milk slipped 0.25 cent closing at $1.3675 with one load traded. Class IV futures have not yet been traded. Butter futures are 2.22 cents lower to 0.10 cent higher.

Friday Morning Dairy Market Update - Traders May Be Cautious Ahead of Cash

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	4 to 8 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	3 to 4 Lower

MILK:

Traders may be cautious ahead of spot trading. There is a possibility buyers of cheese may not be as aggressive at these levels. Milk production is improving seasonally but is running below a year ago. Bird flu is having an impact on production in some areas and is likely going to continue to affect milk output to some extent. Consumer demand will be the key to price strength moving through the first half of the year. Currently, there is a sufficient supply of milk for demand. The weather forecast is for extremely cold weather to move across much of the country which may impact production and transportation of milk. However, this may not impact the market very much overall.

CHEESE:

Cheese prices have maintained the recent price increases indicating the market is supported. Buyers have been aggressive as prices increased, but may now have reached a level where buyers and sellers are comfortable for the time being. Reduced milk volumes will be available for manufacturing with schools back in session.

BUTTER:

The downside of the butter price is expected to be limited, but further weakness is possible. Holiday demand is finished, and first quarter demand is being assessed. Buyers may remain active at lower prices as they would rather pay storage rather than chase the market higher as the year progresses.

Thursday Closing Dairy Market Update - Class III Milk Futures Close Unchanged to Higher

MILK:

Class III milk futures closed higher in some contracts while most remained unchanged for the day. The limited price movement of the underlying cash provided little for traders to hang their hat on. The trading volume was rather light and may not move back to full trading until next week. Class IV futures showed no trading activity even though butter and nonfat dry milk prices slipped. The December Federal Order class prices were announced today. The Class II price is $21.28, down $0.24 from November but up $1.40 from December 2023. The Class III price is $18.62, down $1.33 from November but up $2.58 from a year earlier. The Class IV price is $20.74, down $0.38 from November but up $1.51 from a year ago.

The FSA released the November average soybean meal price this morning which was needed to calculate the income over feed price for the Dairy Margin Coverage program. The average soybean meal price was $316.18 per ton. This price was down $26.67 from the October price. This puts the income over feed price at $14.29, down $0.88 from October and far above the $9.50 level that would trigger a payment.

AVERAGE CLASS III PRICES:

3 Month:	$20.32
6 Month:	$19.86
9 Month:	$19.57
12 Month:	$19.37

CHEESE:

Cheese prices maintain the recent gains indicating the market may have found support with limited downside risk. Buyers may not be interested in stepping back to see if sellers would have cheese to offer to the market providing an opportunity to purchase at lower prices. Buyers would rather hedge against higher prices rather than speculate over potential weakness. Cheese inventory may begin to increase but it will remain below a year ago for the foreseeable future.

BUTTER:

The butter price is expected to see a limited downside as buyers may step in to take advantage of lower prices. There will be interest in building inventory to increase supplies in the case that milk production and cream supplies tighten over time.

OUTSIDE MARKETS SUMMARY:

March corn closed up 1.00 cent per bushel at $4.5950, March soybeans closed up 1.50 cents at $10.1200 and March soybean meal closed up $3.00 per ton at $319.90. March Chicago wheat closed down 5.75 cents at $5.4575. February live cattle closed up $2.00 at $193.60. February crude oil is up $1.41 per barrel at $73.13. The Dow Jones Industrial Average is down 152 points at 42,392 with the NASDAQ down 30 points at 19,281.

Fluid Milk and Cream - Western U.S. Report 1

Clearly, milk production in California has wrought concerns for marketers in the region and throughout the country. Recently, though, as processors have been running lighter holiday schedules, milk and cream have been more available in the Golden State. 

In the Southwest, cooler weather has improved recent milk output numbers. 

Pacific Northwestern farmers are continuing to see steady to strong farm milk production. 

In the mountain states of Idaho, Utah and Colorado, milk production is noted as hearty. Class I demand has regained some steam in the region, but contacts say previous weeks were slower due to the holiday downtime. Some contacts say Class I supply and demand were somewhat more stable this holiday season than in years' past. 

Cream in the region is widely available. Some contacts say they have never seen cream volumes at this level and at multiples this low (reported as low as .70 this week into butter production.) Contacts expect steady milk demand moving into 2025, while cream markets are less than stable moving forward. In the mountain states, cream availability is ample. Whereas in the coastal areas, it is somewhat steady when compared to previous weeks. 

Thursday Midday Dairy Market Summary - Limited Movement in Spot Prices

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$4.80 Higher
LIVE CATTLE:	$1.85 Higher
DOW JONES:	341 Points Lower
NASDAQ:	180 Points Lower
CRUDE OIL:	$1.47 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased by 0.25 cent closing at $1.9125 with one load traded. The barrel cheese price remained unchanged with no loads traded. There was an unfilled bid and two uncovered offers for blocks and an uncovered offer for a load of barrels remaining at the close. The dry whey price remained unchanged at 75 cents with no loads traded and only a seller showing up Thursday. Class III futures are steady to 14 cents higher. The butter price slipped 0.50 cent closing at $2.5450 with 11 loads traded. Grade A nonfat dry milk declined by 0.50 cent closing at $1.37 with six loads traded. Class IV futures have not yet been traded. Butter futures are 3.15 cents lower to 1.00 cents higher. Dry whey futures are steady to 0.50 cent higher. The December Federal Order Prices will be announced Thursday afternoon.

Thursday Morning Dairy Market Update - Light Activity Expected Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 5 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	2 to 4 Lower
Soybean Meal Futures:	Mixed
Wheat Futures:	Mixed

MILK:

The new year will not change the market just because the calendar changed. It will change based on the market fundamentals that will unfold and many things will change. Underlying cheese prices were strong through the end of 2024 and may continue to find support. However, prices may be near a threshold, making it difficult to push through early in the year. Bottling demand is increasing as school accounts will be filled as students return to school. This is not expected to tighten the milk supply for manufacturing but will reduce the volume and price of spot milk. Spot milk last week showed stronger prices with discounts reaching $4.00 below class and a vast improvement from the previous week and year. The USDA will release the December Federal Order Class Prices Thursday.

CHEESE:

Cheese prices have had a nice increase recently. This may be nearing a price threshold as buyers may become less aggressive if they see reduced demand and sufficient cheese production. The increase in cheese prices has improved the outlook for milk prices early this year. These prices may hold as long as demand remains at the current pace.

BUTTER:

The butter price is expected to find support near the current level as buyers look ahead to this year and prepare for expected first-quarter demand. The large decline in inventory in November and good demand in December should have inventory near the levels of a year ago.